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HMRC internal manual

Insurance Policyholder Taxation Manual

Fundamental concepts: what is a group life policy?

A group life policy is a life policy that

  • insures more than one life, and
  • can pay benefits on the death of each of the lives.

The statutory definition is at ITTOIA05/S480 (2).

The nature of a group life policy is that payments arising because of a single death doesnot bring the policy to an end, so a group life policy death is not one of the eventslisted at IPTM3500 where the whole of the rights are given up.

A wide class of protection-only group life policies is taken out of the chargeable eventrules, see IPTM7020 onwards. But if a group life policy iswithin the chargeable event rules then the usual rules apply on death events, see IPTM7390. Group life policies are often purchased by employers ortrade unions to cover employees, or by partnerships to cover partners.

Increasingly, the term ‘collective life policy’ is being used to describe agroup life policy that does not relate to a scheme established to cover employees orpartners. A typical example is one used by a credit company to cover loan customers.

Further reference and feedback IPTM1013